Legalized Marijuana Remains a Major Home Insurance Issue

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  • Across the country, a small but growing number of states have legalized marijuana, which may be good news for some residents. However, it might not be such a welcome turn of events in the event of home insurance claims that have to be filed, because legalization at the state level comes despite the fact that the plant is still technically illegal federally. That, in turn, can really complicate a claims issue, and therefore insurance agents operating in states where pot is now legal might want to take the time to explain to residents the impact this can have on their coverage.

    While there are many concerns related to the legalization of marijuana in individual states, and what that might do for home insurance claims and liability, one issue that’s growing more common is home explosions, according to a report from Last year, some 32 structures in Colorado were home to some sort of explosion as a result of legal marijuana growers trying to render their plants into a substance known as hash oil. That constituted a substantial increase from the 12 the year before.

    A growing problem?
    This is, in some ways, an issue in a lot of states, as California, Florida, and Illinois have also seen this type of incident increase, the report said. However, it should be noted that these incidents are actually illegal in most states, because the production of hash oil technically constitutes the illegal manufacturing of marijuana even if people are growing their own supply of the plants themselves within legal limits. Moreover, these explosions, because they are technically the result of illegal activity at the federal level, are not likely to be covered by home insurance policies at all.

    The more insurance agents can do to help people understand what is and isn’t covered by their home policies, whether it’s related to marijuana or not, the better off both sides of the issue are going to be. This is because consumers will get a better understanding of their personal situations, and potentially what they can do to address any changes that come along. Meanwhile, agents will be able to cultivate better customer service relationships overall, which clients tend to actually prefer to being able to save a bit of money on their plans. Striking the right balance between the two can consequently go a long way toward boosting retention rates and even recommendations.